Project how your investments could grow over time with compound interest and regular monthly contributions.
This calculator provides projections based on a fixed rate of return. Actual investment returns vary and past performance does not guarantee future results. This is not financial advice. Consult a qualified financial adviser before investing.
Understanding how your money can grow over time is fundamental to building long-term wealth. Whether you are saving for retirement, a house deposit, or financial independence, compound interest is the most powerful tool available to ordinary investors. Albert Einstein reportedly called it the eighth wonder of the world. This investment calculator projects how an initial lump sum and regular monthly contributions could grow at a given rate of return. It accounts for different compounding frequencies and shows the inflation-adjusted value so you can see what your future wealth would be worth in today's terms. Use it to compare strategies, set realistic targets, and understand the impact of starting early.
To project your investment growth: 1. Enter your initial investment. This is the lump sum you are starting with. Enter 0 if you are beginning from scratch with monthly contributions only. 2. Enter your monthly contribution. This is the amount you plan to add each month. Even small regular amounts make a significant difference over time thanks to compounding. 3. Set your expected annual return. UK equities have historically delivered 7-10% per year before inflation, while a balanced portfolio might average 5-7%. Use a conservative estimate for planning. 4. Choose your investment period in years. Longer time horizons allow compound interest to work harder. Even 5 extra years can make a substantial difference. 5. For more detail, expand the advanced options. You can change the compounding frequency (monthly is standard for most funds) and set an inflation rate to see the real purchasing power of your future investment. 6. Review the results. The final value shows the nominal amount. The inflation-adjusted value shows what that money would buy in terms of today's prices.
The calculator uses the standard compound interest formula with regular contributions. For a lump sum with no contributions, the formula is: FV = PV x (1 + r/n)^(n x t), where PV is the initial investment, r is the annual rate, n is the compounding frequency, and t is the number of years. When monthly contributions are added, each contribution is compounded from the point it enters the portfolio. The calculator processes this iteratively: at each compounding period, it adds the contributions for that period, then applies the periodic return rate. The inflation-adjusted value divides the final nominal value by (1 + inflation rate)^years, converting future money to today's purchasing power. This is important because GBP 100,000 in 20 years will not buy as much as GBP 100,000 today. The chart breaks down your final value into total contributions (money you put in) versus interest earned (money your money made for you). Over long periods, the interest component typically exceeds the contributions, demonstrating the power of compounding.
This calculator assumes a constant annual return, which is useful for planning but does not reflect real market volatility. In practice, investment returns fluctuate year to year. Pound-cost averaging (regular monthly contributions) can help smooth out this volatility. Tax wrappers like ISAs and SIPPs can shelter your returns from tax. Always consider your risk tolerance and investment goals, and seek professional advice for significant investment decisions.